Valeura Energy shares spurt higher on Turkey deep exploration well results

Valeura Energy (TSE:VLE) shares added over 9% as broker Mackie repeated a ‘buy’ on the Turkey-focused  oil group after its Yamalik-1 exploration well threw up positive results.

Yamalik-1 was designed as the first test of the deep, basin-centred gas potential in the Thrace Basin of northwest Turkey.

It was sunk to a depth of 4,196 metres, cased and left in ready for production testing.

Bill Newman, analyst at Mackie, said that although the results were preliminary, the over-pressured and potential gas saturated reservoir in the well supported the group’s theory that its Banarli licences cover a basin-central gas play with multi-tcf (trillion cubic feet) potential.

Last year, Valeura entered into a phased farm-out agreement with Norwegian group Statoil to explore the deeper formation below 2,500 metres on the group’s 100% owned Banarli Licences.

Phase 1 includes Statoil funding one deep exploration well (Yamalik-1) at a projected cost of US$12.85mln

Statoil and Valeura have now decided to proceed with a multi-stage fracking and testing program expected to begin in the third quarter of 2017.

Statoil will fund 100% of the completion and testing program up to a cap of 110% of the agreed budget.

Mackie has a $1.75 target price on Valeura’s low risk shallow drilling program that should grow production in 2017 and funded high impact exploration program targeting the deep gas play.

Valeura shares are currently up 9.23% at C$0.71 each.

Story by ProactiveInvestors